Winnipeg Free Press - PRINT EDITION

Chrysler news leaves Italian unions fearful

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ROME -- Shares in Fiat soared on Thursday on the news the Italian automaker will take full ownership of Chrysler, but some Italian unions worried what the deal will mean for jobs and investments in the country.

In a New Year's Day announcement, Fiat Spa said it could complete its acquisition of Chrysler without having to raise new capital through a rights issue. Investors cheered the fact, bidding the shares up 12 per cent on the Milan exchange. The stock was up by as much as 15.8 per cent earlier in the day.

Fiat will buy a 41.5 per cent stake held by a United Auto Workers union trust fund for $1.75 billion (about 1.35 billion euros) in cash and another $1.9 billion in extraordinary dividends. The deal is due to close by Jan. 20.

Italian unions have long fretted the global reach of Fiat could come at their expense in terms of production, job security and contract conditions. Their leaders immediately pressed for guarantees, appealing to the government to help safeguard their concerns.

"It is indispensable that Fiat say what it intends to do in our country," Susanna Camusso, leader of the nationwide, left-leaning CGIL labour confederation, said in a statement.

While praising the deal as important for Fiat to keep up with rivals, Camusso insisted the company's "strategic direction and planning remain Italian" and that it "keep a significant presence in Italy."

-- The Associated Press

Republished from the Winnipeg Free Press print edition January 3, 2014 B12

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